Mindless eating and finance

I have written before about the link between our finances and our health. In a previous post I said:

"I strongly believe that our relationship with money can be very like our relationship with food. The same emotions are at play. There is a strong connection between mind, body and financial health. You have to be healthy and strong to generate prosperity and abundance in your life."

Ben Carlson has today posted a blog post titled "Mindless eating and finance". He too acknowledges the analogy between investing/finance and dieting/weight loss. He says:

"The equations for each are fairly simple in theory:

For your finances: Spend less than you earn, live below your means, budget, save and invest early (and regularly) and don’t take on excessive levels of debt.
For your health: Exercise regularly, don’t overindulge, avoid too many sweets, eat less and track your eating habits."

Simple in theory.

But the truth is that knowledge alone is not enough to change behaviour.

"If it was we would all be rich with six-pack abs."

If you are overweight, the chances are you know exactly what to do to slim down and live a healthy life. Likewise, if money is causing you trouble, I can tell you what will help you, but you have to want to help yourself. James Montier, the author of several books on behavioural investing writes:

"It is confession time. As anyone who knows me can attest, I am overweight (although I prefer to think of myself as simply too short for my weight). In fact, according to the body mass index which compares height to weight (designed by size fascists, I’m sure) I am on the borderline between overweight and obese.

I know how to correct this problem. I should simply eat less. However, I find this incredibly hard to actually do. So despite that fact I know how to change, I don’t change, so my knowledge simply doesn’t translate into better behavior. Rather I file the information in the category of “things I know and choose to ignore.”"

So if knowledge doesn't, by itself, make us change our behaviour, what does? Well, it's about habits. It's about breaking bad habits and instilling better ones. And it applies to diet, exercise, money and investing. Ben Carlson points out though that "bad habits are hard to break". Ain't that the truth!

We all need discipline in our lives, whether it is to fill our fridge with fruit and veg, make it to the gym class, start a budget, or start investing. Mostly it helps to have an expert lend a hand. I have never been fitter or stronger than I have been since working with a CrossFit instructor, one-on-one. Tarasa works me harder than I would ever do by myself.

It's the same for money. I know that for almost everyone out there, they will be wealthier and more likely to achieve financial success if they work with a compassionate, knowledgeable and experienced advisor, than they will be if they try and go at it alone.

Want to get started? That bit really is simple. Just drop me a line....georgie@libertywealth.ky

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